Which of the Following Statements About Financial Markets and Securities

question 125

Multiple Choice

Which of the following statements about financial markets and securities is true?

• A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.
• B) A debt instrument is intermediate term if its maturity is less than one year.
• C) A debt instrument is intermediate term if its maturity is ten years or longer.
• D) The maturity of a debt instrument is the number of years (term) to that instrument's expiration date.

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Definitions:

Direct Materials

The essential components or raw inputs used directly in the manufacture of goods, critical to the production process.

Work in Process

Inventory representing partially completed goods, which include direct labor, material, and overhead costs incurred up to the point of measurement.

Finished Goods

Finished goods are merchandise or products that have completed the manufacturing process and are ready to be sold to customers.

Conversion Cost

The sum of direct labor costs and manufacturing overhead costs, representing the total expense to convert raw materials into finished goods.